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Tacy's Diamond pipeline 2020 - LGD's about 7-8% of polished

Rockdiamond

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Garry!!!
Can you translate?
Maybe it's just me, but I can't decipher the meaning of the chart....
 

Garry H (Cut Nut)

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Garry!!!
Can you translate?
Maybe it's just me, but I can't decipher the meaning of the chart....

This is the diamond pipeline that Chaim has been making every year since before many readers were born.
From it you can see where diamonds come from, how much money is made in gross totals in each step by those sectors.
Chaim has added an estimate that $1 billlion or more of synthetic diamonds (his term, not mine) entered at wholesale value into the chain (costing around 30% to polish).
1/13.37 x 100% = about 7.5% by value is the LGD component by their estimation.
 

oncrutchesrightnow

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LGD polished material made up 7.5% of the value of all polished diamond material in 2020.

In 2020 $700 million in LGD rough was produced resulting in $1 billion worth of LGD polished. A total of $13.37 billion worth of polished total (LGD polished + Ancient polished) was produced. $1 billion is about 7.5% of $13.37 billion.
 

oncrutchesrightnow

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If LGD sell at 20% the price of ancient diamonds, then if every polished diamond material (LGD and ancient) was of the same weight and quality, LGD material would make up 40% of polished diamond material in 2020.

I do not know the overall weight and quality of LGD polished material versus ancient polished material so cannot really say what proportion of all polished diamonds were lab grown. A few giant outliers in the ancient diamond category would skew the estimate too much. And apparently right now there is a big demand for 2.5 ct ancient diamonds but low supply. That fact would skew the estimate in the opposite direction. Add quality differences and there are too many moving parts.

IANAE and might be wrong but really enjoy reading these conversations and hope they keep going.
 

Rockdiamond

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Thank you so much for deciphering.
And apparently right now there is a big demand for 2.5 ct ancient diamonds but low supply. That fact would skew the estimate in the opposite direction. Add quality differences and there are too many moving parts.

This is so spot on.
Especially when one considers the quality of sellers.
It's possible that demand for Natural Diamonds will stay strong, and keep prices stable in spite of rising production of diamonds made in factories, which seems likely to occur.
Which seems likely to result in many more poor quality Lab Grown Diamonds coming onto the market.
That could sustain prices on the best handpicked Lab Grown stones......
 

Garry H (Cut Nut)

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It's possible that demand for Natural Diamonds will stay strong, and keep prices stable in spite of rising production of diamonds made in factories, which seems likely to occur.
Which seems likely to result in many more poor quality Lab Grown Diamonds coming onto the market.
That could sustain prices on the best handpicked Lab Grown stones......
My prediction is well and truly on the record.
Mass market lower quality NQR natural diamonds will largely be replaced by LGD's.
That is about half the value from a mine.
Therefore there will be less money for prospecting.
Therefore fewer new mines in the future.
So:
Natural (ancient) diamonds will become rarer over time.

(There will be a demand from wealthy geeks who love the technology for several years too).
 

LilAlex

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The data mostly comes from government records of $$$'s - but it is better than zip

Asking again -- so the units are what?

Not questioning the data (can not even tell what they are). Questioning the lack of units for any number on that chart.

Kg, tons, dollars, billions of dollars, millions of ct-weight, pillowcases...?
 

oncrutchesrightnow

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Asking again -- so the units are what?

Not questioning the data (can not even tell what they are). Questioning the lack of units for any number on that chart.

Kg, tons, dollars, billions of dollars, millions of ct-weight, pillowcases...?

Billions usd
 

Garry H (Cut Nut)

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Asking again -- so the units are what?

Not questioning the data (can not even tell what they are). Questioning the lack of units for any number on that chart.

Kg, tons, dollars, billions of dollars, millions of ct-weight, pillowcases...?

1627778796527.png
 

oncrutchesrightnow

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Wonder how much “greater” the values are for equal to or greater than $700 million; or equal to or greater than $1 billion. It isn’t just a rounding effect for low numbers because there are lower numbers on the chart.

So LGD rough OR polished could be like $100 billion and the chart would technically not be lying.

Wonder if the estimation wiggle room is due to lack of knowledge or due to protecting trade information. Especially if the ratios between LGD polished and LGD rough are significantly higher than shown one way or the other.

Most experts on PS seem to think that the mass quantities of LGD sold on big websites are inferior quality. If that is true then the estimation wiggle room would most likely be masking markup at the retail level. So LGD prices will fall due to competitors reducing markup.

I agree with Garry that LGD will replace inferior quality ancient diamonds and for that reason and many others there will be less mining. So prices for ancient diamonds will rise.

Question is whether rise in price of ancient diamonds will offset the market pressure to reduce the cost of LGD.

Any entity that controlled how much ancient diamond material is available enough to sway market value worldwide would have an incentive to run a LGD business at the same time. They could inflate the value of their ancient diamonds enough to sustain the value of their lab grown diamonds. They could also time their Wall Street bets better than the rest of us.

So the only people who should wager actual money on whether the price of ancient or LGD will rise or fall over any given time are the people who control polished production on a grand scale.
 
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